Mike Seery is back this week to give our readers a weekly recap of the Futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Crude oil futures settled last Friday in New York at 60.54 a barrel in July contract while currently trading at 59.72 down about $1.00 this Friday afternoon trading below its 20 day but above its 100 day moving average as the trend currently is mixed. I will be recommending a short position if oil breaks $50 a barrel then placing your stop loss above the 10 day high but at the current time I’m sitting on the sidelines waiting for a breakout to occur as the U.S dollar was up 300 points this trading week reversing much of its recent losses putting pressure on many commodity prices in the last several days.
Sometimes as a trader the best thing to do is sit on the sidelines and be patient and wait for a trend to develop as this market could be headed to the downside in my opinion next week so keep a close eye on this market as a possible trade is coming. Its Memorial Day weekend here in the United States which creates high demand for unleaded gasoline as millions of Americans will be on the road in the next several days, however I think that’s already been priced into the market as the fundamentals I do believe will turn bearish once again but avoid choppy markets as they are very difficult to trade successfully in my opinion and wait for the breakouts to occur which could happen in Tuesday trade.
Chart Structure: Improving
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Gold futures in the June contract are trading above their 20 day but below their 100 day moving average telling you that the trend remains mixed as I’ve been sitting on the sidelines in this market for quite some time as prices are stuck in an eight week consolidation. The U.S dollar was up over 300 points for the trading week as the ECB basically stated that they will add more stimulus to push the Euro currency lower as the tide has turned and I see no reason to own gold at the present time coupled with the fact that the stock market is hitting another all time high as interest is in the equities and not in the precious metals. The next breakout is around 1,230 to the upside but the chart structure is poor at the current time so look at other markets that are beginning to trend as the U.S dollar in my opinion looks to break 100 in the coming weeks which will continue to put pressure on gold prices. Gold settled last Friday at 1,225 an ounce while currently trading at 1,205 down $20 for the trading week as Memorial Day weekend is upon us.
Chart Structure: Poor
Coffee futures in July contract are lower for the 4th consecutive trading session at 126.50 a pound hitting a fresh contract low trading far below their 20 and 100 day moving average as world production was raised to 154.5 million bags above recent estimates sending coffee prices sharply lower as I was recommending a short position, however I got stopped out as prices hit the 10 day high and I’m now sitting on the sidelines as the risk is too high in my opinion. The chart structure in coffee is terrible at the current time but I’m certainly not recommending any type of bullish position as prices could retest the September 2013 lows around 105 a pound in the coming weeks as worldwide production seems to be growing on a weekly basis. As a trader I look for the risk/reward to be in your favor coupled with very solid chart structure but at the current time this market does not meet either of those theories so I have to wait for better chart structure to develop as it might take a week or so depending on market activity, however lower prices look to be ahead as many of the agricultural markets especially the soft commodities continue to move lower in the short term, however oversold conditions currently exist in my opinion.
Chart Structure: Poor
Sugar futures in the July contract are trading lower for the 3rd consecutive trading session as I was recommending a bullish futures position when prices broke out around 13.55 getting stopped out this week around the 12.66 level losing around 90 points or $1,000 plus slippage and commission as that trade went south immediately. Sugar futures are now trading below their 20 and 100 day moving average hitting a 7 week low as I’m now sitting on the sidelines as the chart structure remains poor at the current time. Sugar futures settled last Friday at 12.86 while currently trading at 12.37 down about 50 points for the trading week as this market remains extremely choppy as I will wait for a lower risk entry point which could be several weeks away in my opinion. Many of the commodity markets remain choppy as I have very few recommendations at the current time as I’m trend follower but the one thing that I do understand is that the trends will come back it just may take some time so be patient as volatility will come back.
Chart Structure: Poor
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